Zacks Investment Research downgraded shares of CBS Corporation (CBS) from NEUTRAL to UNDERPERFORM on November 26, 2014, with a target price of $50.00.
Rise in programming costs by 20% in the third quarter of 2014 and expectations of further rise in future due to new agreement with the NFL for Sunday night along with the broadcasting of Thursday night NFL game remains matter of concern. Moreover, currency headwinds are likely to get more pronounced in the coming days owing to a stronger dollar and will impact both top and bottom lines. The adversities surrounding the stock compelled us to downgrade our recommendation to Underperform. In the quarter, unfavorable forex fluctuations alone hurt earnings per share by $0.04. But still earnings came a penny ahead of the Zacks Consensus Estimate, thanks to the buyback program. Further, an unimpressive content licensing pipeline for the next two quarters will result in tougher year over year comparisons. All these have resulted in a downtrend in the Zacks Consensus Estimate.
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